Dominic Chappell gives evidence to the business, skills and innovation select committee about the collapse of BHS.
Photograph: Reuters

Dominic Chappell, the former owner of BHS, tried to pay for a family holiday to the Bahamas on company expenses and took a £90,000 loan from the department store chain to pay a personal tax bill, according to evidence submitted to MPs.

Why was Dominic Chappell so relaxed about the hole in BHS's pension fund?

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The allegations were made by Darren Topp, chief executive of BHS, in a submission to the parliamentary committee investigating the demise of the company, which accuses Chappell of treating the retailer’s money as if it was his own personal funds. However, Chappell said the claims were “pathetic and petty” and accused Topp of “deliberately lying” to discredit him.

The latest claims and counter-claims by Topp and Chappell are likely to infuriate BHS staff and creditors. BHS collapsed into administration in April, putting 11,000 jobs at risk and leaving debts of more than £1.1bn, including a £571m pension deficit. The demise of the company could cost the taxpayer £36m in unpaid tax and redundancy payments.

Topp alleges that Chappell created a “clear nepotistic environment” at BHS, bringing in friends and family into key positions, including his uncle as chairman.

In a series of allegations about Chappell’s conduct, he said Chappell, who has been declared bankrupt three times, tried to buy flights to the Bahamas for his family from the company travel budget. After Topp refused, Chappell asked for his salary to be paid early so he had the money for his holiday. The human resources department agreed to the payment on the basis of “hardship”.

Topp also alleges that Chappell instructed BHS’s finance department to pay him a £90,000 loan while the company’s finance consultant, Michael Hitchcock, was on holiday.

“This was at a time when cash resources were limited and needed to pay both suppliers and employees payroll,” Topp said. “Chappell saw no distinction between the company’s money and his own personal money; he saw them as one and the same. The level of financial governance shown by Chappell was very poor.”

Chappell hit back at Topp, saying he wanted to book the flights to the Bahamas through the company’s travel agents because they were offering a competitive price. He he asked to pay for them on the company account because he had been out of the office for “a number of days” on the day they needed to be booked and did not have access to his credit card or bank log-in details.

Chappell said he planned to pay for the trip when he returned but Topp blocked Chappell’s request. “There was no intent whatsoever to have the company pay for my private travel, it was purely an issue of logistics,” Chappell added.

The former BHS owner said the early payment of his wages had been suggested by the company’s management and that the £90,000 loan was approved by Topp and repaid within seven days through a post-dated cheque that Chappell handed over when the loan was agreed.

“It is absolutely childish for Darren Topp to suggest this when he often acted against the board’s decisions,” Chappell said of the allegations. “If these are the only two points that Darren Topp can find to suggest that I was running BHS bank account as my own bank account, it’s pathetic and petty.”

Chappell alleged that Topp received a first-class rail season ticket worth between £5,000 and £6,000 and that BHS was paying for the insurance on his new Porsche car. Chappell said Topp did not have approval for this, although a spokesman for BHS said this was part of Topp’s contract, which was negotiated with Chappell.

Frank Field, the chairman of the work and pensions committee, said the allegations against Chappell and his Retail Acquisitions consortium were quite extraordinary.

The Labor MP added: “We are still elucidating the full story of the final collapse of BHS, but it happened under Dominic Chappell and RAL’s [Retail Acquisitions’] stewardship. They should account fully and properly for their decisions and actions, some of which appear quite extraordinary.”

Separate documents released by the committee from Olswang, Chappell’s advisers, claim that Sir Philip Green forced Retail Acquisitions into buying BHS earlier than it wanted. Green owned BHS for 15 years until he sold it for £1 to Retail Acquisitions on 11 March 2015.

Olswang states in a letter to the Pensions Regulator that on 5 March 2015 it was told by Arcadia, Green’s retail business, that it needed to complete the deal “immediately” when Retail Acquisitions wanted another four weeks to conduct due diligence. The deal was completed on 11 March.

The document also claims that Retail Acquisitions only discovered on 26 February that it was buying BHS with the pension deficit, as opposed to Green restructuring it seperately. The evidence will raise further questions for Green about his handling of the sale of BHS and its pension deficit.

It has been published as administrators warned that unsecured creditors to BHS, including landlords and suppliers, were likely to receive less than 3p for every £1 owed. Duff & Phelps, the administrator, delivered the news at a meeting for creditors in London on Thursday when it announced that FRP has been appointed as the second administrator after the Pension Protection Fund raised concerns.

Malcolm Weir, the head of restructuring and insolvency at the PPF, said: “At the BHS creditors meeting we voted to appoint additional administrators to work with the current administrators. This is an unusual step, but one we regard as appropriate given the circumstances of this administration.”

A spokesman for FRP said: “Once appointed, we shall focus on investigations arising from the insolvency of BHS and look forward to working with Duff & Phelps as they continue to focus on trading the business and exploring opportunities to maximise realisations for creditors.”

Creditors speaking outside the meeting expressed their frustration at the collapse of BHS, with one saying the interests of suppliers and landlords had been “completely swamped” by the PPF, which is by far the largest creditor owing to the state of the BHS pension fund.

A representative for a home furnishings supplier said: “They [the PPF] are disenfranchising all the other creditors. The government wants all creditors to be protected but the government created PPF is riding roughshod over small independent creditors.”

The administrators told the creditors that they may get more than 3p in the pound if Green agrees a deal with the Pensions Regulator to make a cash injection into the BHS pension scheme.

The allegations against Dominic Chappell in parliamentary evidence

• Retail Acquisitions loaned £1.5m to a company that owns the house that Chappell’s father lives in.

• Just days before BHS called in administrators, Chappell moved £1.5m out of the company and into BHS Sweden, an unconnected company. The money has since been paid back.

• Chappell put none of his own money into BHS.

• Chappell organised a £25m loan for BHS from a property company that led to the retailer paying back £31m. He later took a personal loan from the same business.